knowledge 8 June 2020 |

Money talks, but it can’t walk: Tenant’s access temporarily preserved

This decision¹ concerns a dispute between O’Flaherty’s (Nassau St) Limited, trading as Reads (“Reads”), and their landlord, Setanta Centre Unlimited Company (“Setanta”). Reads operates its business out of a unit in the Setanta Centre (the “Premises”). The Premises can be accessed either through the concourse of the Setanta Centre from Nassau Street (which Reads alleges is the “Primary Access Route”) or from the much quieter Setanta Place.

Setanta has planning permission to redevelop the Setanta Centre and, in initiating the development works, is alleged to have blocked off the Primary Access Route to the Premises. Although Reads’ access from Setanta Place was undisturbed and it had no express easement or right of access from Nassau Street, it sought an injunction claiming that the Primary Access Route is protected by an implied easement created by the common intention of the parties, and that the destruction of this right is an interference with its property rights. Reads argued that an interlocutory injunction should be granted as there would otherwise be no prospect of returning to the status quo. Setanta argued that damages would be a sufficient remedy in the event that Reads were ultimately successful at trial.

The nature of an interlocutory injunction

In its judgment, the Court considered the nature of an interlocutory injunction (as a means of finding a temporarily just solution between the parties pending a full hearing), and the well-established principles as recently set out by the Supreme Court in Merck, Sharp and Dohme v Clonmel Healthcare². The Court noted that at interlocutory stage it should not make any conclusions as to fact. The Court considered the details of the lease in question, the law in relation to implied easements and the doctrine of non-derogation from grant, and concluded that despite the fact that the existence of an easement remained in dispute, the Court was merely required to determine whether the issue required further consideration. The Court concluded that there was a fair issue to be tried as it was arguable that Setanta has affected Reads’ use and enjoyment of the Premises by interfering with the Primary Access Route. 

The adequacy of damages

The Court acknowledged that if it refused to grant the interlocutory injunction, construction would commence and any potential remedy for Reads would then lie in damages. The Court agreed with Reads in finding that the destruction of an implied easement is a breach which is actionable in itself. The Court did not agree with the defendant that the loss was purely commercial and noted that where there is an interference with property rights a plaintiff does not have to demonstrate that any damage will actually occur.  

The Court emphasised that “while many events can be monetised, it is not doing justice if this is done in every case”³. The Court expressed the view that it is more important to give effect to the property rights agreed between the parties, than to allow a development to proceed. In citing Merck, Sharp and Dohme v Clonmel Healthcare and Allied Irish Banks Plc v Diamond⁴, the Court held that an interlocutory injunction would be granted as “Certainty for leaseholders, in commercial leases just as in residential, is more important as a societal value than a single building project. It is also more important than the availability of compensation if leasehold rights are breached”⁵.

Conclusion

This judgment serves as a reminder of the particular status afforded to property rights in Ireland and that the rights and obligations as agreed between a landlord and a tenant should be carefully considered in the context of proposed developments.

Also contributed by Lisa Leonard.